Friday, July 10, 2015

Lesson #210: Need a Salesperson? Recruit Three!

Share

A startup cannot survive without revenues, and more importantly,
revenue growth that will impress investors.
And, oftentimes, this success rests squarely on the shoulders of
your sales team. Therefore, your sales
team will make or break your success. Hiring your sales team is arguably the single most important hires
you are going to make. You have to get
it right!!

The problem is, more often than not, it is so easy to get it
wrong. Especially, as a first time
entrepreneur that does not have past experience in hiring salespeople, knowing
the right questions to ask, that are specifically relevant for your
business. I have previously written
about the 1,024
Types of Salespeople that are out there, so I won’t repeat those same
details in this post. But, it critical,
you are perfectly clear on what you are looking for, before you start
recruiting in the first place.

And, to layer on additional pitfalls here, salespeople are
salespeople at the end of the day. It is
in their core DNA to tell you whatever they think you need to hear in order to
close the deal. Regardless of whether or
not it is really what they are comfortable with. As examples, not all salespeople thrive in an
unstructured and chaotic startup environment.
And, not all salespeople are willing to roll up their sleeves and do the
dirty work themselves, without a support team helping them, especially if they
have a history of managing other salespeople.

The only way to truly know if you are making a well-educated
offer is to ask the right questions as it relates to the above issues, and
speak to references. Preferably ones you
dig up on your own, and not the ones they provide during the interview
process. The other key thing is learning
how to “read between the lines” on their resumes. Even if they have all the right past
companies or positions, if you see a lot of job hops in a salesperson’s resume,
that is typically a very ominous indicator of future success (or lack thereof,
in this case). So, tread cautiously in
those situations. This post I wrote on How
to Screen Salesperson Candidates may help you here.

But, the sad reality is, as well as you screen candidates
and ask all the right questions, you are only going to get it right one in
every three attempts, based on average historical experience. That means you only have a 33% chance for
success in hitting your sales targets with every hire!! That is why I suggest testing three
salespeople during a 90-day probationary period first, before deciding on which
one you want to move forward with long term.
The problem with that strategy is, not many sales candidates are willing
to play that game. So, sometimes you
just have to take the leap and hope you got it right. And, structure their compensation package in manner
that is heavily weighted towards pay-for-performance (e.g., heavy on
commissions, light on salary, until they are proven).

The core issues at hand here are the following: (1) startups
often have limited capital, and the worst thing you can do is waste it on
underperforming sales staff members; and (2) the longer a bad salesperson is in
place, the further out the timeline will be before material revenues will be
had (especially in long sales cycle companies that can be up to two years in
the making). The combination of these
two elements, can often be the nail in the coffin for most startups: wasted expense plus lost revenues being the ultimate
recipe for disaster.

But, hey, if building a startup was easy, anyone would do
it. So, saddle up, and get ready for one
heck of a ride in building your revenues.
Hopefully, this post will help you avoid known pitfalls, and increases
your odds for sales success.

0
comments:

Learn More about Red Rocket

Red Rocket can help your business "blast off"!! Our Partners are proven CEO's and CMO's, that have already mastered the same growth challenges you are experiencing. We can help you with your growth strategy, execution or financing needs. Learn more at RedRocketVC.com. Or, check out our explainer video and free e-books.

Red Rocket is a featured contributor on entrepreneurship for many trusted business sites:

About

Red Rocket is your "one-stop shop" for growth: we help B2C and B2B companies with their growth strategy, execution team and financing needs. We are particularly deep in the digital technology space, but have done work across industries. We have consulted or mentored over 750 companies, to date.This blog serves as a small business executive's strategic "playbook", with actionable "how-to" lessons on a wide range of topics, including business, strategy, sales, marketing, technology, operations, human resources, finance, fund raising and more. Click the "Lessons 1-202" tab for the full list, or search by topic using the "Categories" tab.